Wednesday, February 23, 2011

02.23.2011

SILVER HOLDS ABOVE $33



To enlarge any image, click on them



Today we seen the dow jones fall another 100 points which puts it down between two and three percent for the week and the Nasdaq is down around four percent. Gold is up over one percent, Silver is up almost four percent, Platinum is down over three percent, Copper down over three also and Palladium is down over nine percent. It's interesting to see Silver and Gold hanging on as the rest of the markets go to the down side. In today's action it traded mainly sideways, but it was an up day. In the video I was talking about the importance of the $33.59 level. The first test of this managed to break above and hold above it for over an hour. Then the second time it came to this level it was met with resistance. What I like about this chart is that after it was resistance around 1pm it didn't make new lows and it seems poised to take this level. The reason this handle is so important is because of the Fibonacci from the selling that started from the highs of $34.33 down almost two dollars. For this selling to be a failure it needs to confirm a break above this $33.59 mark. This seems as if it is going to do so very soon and if this is the case then a test to $34.33 should follow us to new highs.



This 15m Line chart is very bullish now as it is well above all of the key moving averages. There has been some corrections in this market after we had some massive gains and because of these corrections, it seems poised to have another move higher. I am getting many comments on a market top and there is absolutely no sign of a top in this market for the intermediate trend even. The technicals and fundamentals are aligning themselves up with big reasons to see higher gains. The fundamentals are such things like the basics to how money is created and suppressed lower, the physical inventory of readily available investment silver as well as its demand in industrial uses. The techs have shown this market to have major moves recently and corrections (price or time) every now and again. We just had one of those now and again corrections through price going from 34.33 to 32.40. This doesn't mean that the correction is over, but I would think its probable that the market makes new highs soon or at least corrects a little bit through time maybe.



What I like about this daily candle chart, is that it shows how the market is consolidating through time on the long term time frame. Intermediate term it corrected through price by going down $2.00 almost. That level is not that much on the daily chart. Correction through time shows indecision and normally these things result through the path of least resistance. This of course is not only higher, but MUCH HIGHER



This is another way of looking at silver. For all the other charts I have shown have been pretty much the Silver to Fiat US Dollars ratio. This is the Silver to Gold ratio and has been weighted in mg (milligrams). There are 1,000 mg in a gram and 31.1 grams in a troy ounce. There will come a time when these silver charts will have to be changed as a currency that dies means we have to let it RIP (Rest in peace). Letting it rest in peace means not talking about dollars much any more and throwing away these charts. It's not dead yet as the kimo is still holding in there.



WHY RISING SILVER & GOLD PRICES IS A GREAT THING!



The video embedded states that the rising gold and silver prices are a bad thing. All key information from the three minute video will be in this video, Because I disagree very heavily on the information in this video I decided to put up this little mini article. In the video the author first states that he has acknowledged many people in the youtube and precious metals community cheering so much that these prices are increasing with “Hooray” kind of reactions. The author states “It is completely wrong” and if gold goes up $30 and Silver $2 that we should “CRY!” without any reason to be happy about it. He then states that it is weakness in the dollar and that the price is not moving at all for any other reason. The next point he makes is that the country is in duress and that by cheering for higher gold and silver prices, then this is pretty much what you are cheering for. The final point from the author is that demand is not there for the commodities and the reason there is demand for gold and silver is because there is a few people awake whom has found out that fiat money is worthless.

My reply to this will start with the authors comments in that we should “Cry” when we see these rising prices and why I see the opposite. With the increase of gold and silver prices, this means that each individual human whom has made moves to get into this metal are seeing gains in their purchasing power, this will give them an advantage during these messed up economic times. This is one currently setup for “Survival of the Fittest” and in my opinion its not a reason to “CRY” when you are making positive steps so that you and your loved ones can survive in this brutal economy. The author stated that it's “Completely Wrong” to be happy with the prices going higher, and I think that it is “Completely Wrong” to enjoy fiat money and a debt system that ensures the suffering of a vast amount of humans. Should we celebrate if JP Morgan is able to short the living hell out of the fixings and bring the price back below $20.00? After all according to this author if its wrong to have reactions of $2 up days, I guess it is “RIGHT” to have happy reactions on $2.00 down days by using the simple law of polarity (opposites).

Finally the author states that it is only the dollar that is making the prices go higher. What we can't do is look at the US dollar index to see if this is true. Because if the USDX goes up a small amount and so does Silver all this tells us is that the US currency was stronger than the other weak currencies. After all, every currency is weak. What we also can't do is look at gold and silver going up in every currency and state “Yes, gold and silver are going up only because of the dollar.” Rather, look at the price of gold and silver in other real assets. If the price of other real assets are cheaper to buy in gold and silver, then its more than just the dollar losing for the price increase and also the asset class gaining value. I will not speak for gold here, but speaking for silver the people whom have purchased silver below the summer 2010 breakout when the price lower than $20 are now at the point where they can gain against many other real assets. Average gas prices on June 14, 2010 were $2.70 and today it is $3.17. If you sold 1 oz of silver for $18.00 in June you could get six and two thirds gallon of gas and today selling for $33 you could get almost ten and a half gallons of gasoline. This is showing not only dollar weakness driving silver up, but also silver gaining in value

Final Comment on why I cheer for Rising prices

The author was correct when he stated that the prices going higher brings duress. It is also correct that the rising prices will be very bad for the economy. However, I personally am cheering for an economic collapse because I don't like the current economy. If you have a house that is 125 years old and has been renovated four or five times you may start to notice there is nothing you can do to keep it a float. What the best idea might be is to tear the house down completely and build a new one with all the fancy current gadgets available today to make it the best house you can imagine. I see the same thing with our economy. The currency has been renovated so many times when you go back to the 1930s when they pretty much went off the gold standard as a renovation. Then in the 1960s and early 1970s is went off the Bretton Woods System which was officially going off the gold standard as well as taking silver out of our dimes and quarters. These were dollar renovations. However the house (cash) is a mess and I would personally like to see this currency/economic standard of living get destroyed so that we can build a new economic standard that can work with today’s gadgets that we have that is the best economy that we can imagine for the people. I know for sure the system where the fed creates money out of thin air and uses interest at many levels is only making many people suffer and this I do not want to see anymore. Call me crazy if you wish, but I have good reason for wanting to see this fiat currency die and I know one of the steps needed for this to happen is an explosion in precious metals and all real assets. There was a wrestler whom performed at the end of 1990s and into the 2000s named “The Rock” aka Dwayne Johnson whom had one of many catch phrases called “JUST BRING IT!” and as far as inflation and economic collapse is concerned, I have to use the same phrase.

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